MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
TO: Dr. Friedrich Wendt, Chief Executive Officer; Katarina Dalmqvist, Chief Financial Officer; Wilhelm Ostermann, General Counsel (Chefjustitiar) — Halcyon Semiconductor Aktiengesellschaft
FROM: Vivienne St. Claire, Partner; Claire Dempsey, Associate — Calderwood & Harkness LLP
DATE: February 18, 2026
RE: Analysis of Nasdaq Global Select Market Initial Listing Standards — Halcyon Semiconductor AG (Proposed Ticker: HCYN)
MATTER NO.: 1032-00003
This memorandum is a privileged and confidential attorney-client communication prepared by Calderwood & Harkness LLP for the exclusive use of the officers and directors of Halcyon Semiconductor Aktiengesellschaft named above. This memorandum is protected by the attorney-client privilege and the work product doctrine. No portion of this memorandum may be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. This memorandum does not constitute a guarantee of any particular outcome and is subject to revision based on developments in the applicable law, facts, and circumstances.
I. Executive Summary
The purpose of this memorandum is to analyze whether Halcyon Semiconductor Aktiengesellschaft ("Halcyon," "HSAG," or the "Company") satisfies the initial listing requirements of the Nasdaq Global Select Market in connection with its proposed initial public offering in the United States through a Level III American Depositary Receipt ("ADR") program. This memorandum is one of several being prepared by Calderwood & Harkness LLP in connection with the Company's planned US capital markets transaction, and should be read in conjunction with the companion memoranda on foreign private issuer status, corporate governance exemptions for foreign private issuers, and Sarbanes-Oxley Act compliance planning.
Halcyon proposes to list American Depositary Shares ("ADSs") on the Nasdaq Global Select Market under the ticker symbol "HCYN." Each ADS will represent two ordinary shares (Stammaktien) of Halcyon. The ADSs will be issued pursuant to a deposit agreement among Halcyon, Meridian Trust Company, N.A. (as depositary), and all holders and beneficial owners of ADSs from time to time. The Registration Statement on Form F-1 under the Securities Act of 1933, as amended (the "Securities Act"), is currently targeted for confidential submission to the U.S. Securities and Exchange Commission (the "SEC") on April 14, 2026, with a target Nasdaq listing effective date coincident with SEC effectiveness (target June 22, 2026) and a first day of trading following pricing (target July 1, 2026).
Conclusion. Based on the analysis set forth below, Halcyon comfortably satisfies the quantitative initial listing standards under each of the four alternative sets of criteria prescribed by Nasdaq Rule 5315 for the Nasdaq Global Select Market — namely, the Income Standard, the Equity Standard, the Market Value of Listed Securities Standard, and the Total Assets/Total Revenue Standard. The Company exceeds each applicable quantitative threshold by a very substantial margin, reflecting its strong and growing financial profile as a leading European power semiconductor company with annual revenues in excess of €3.8 billion and a market capitalization of approximately €8.6 billion.
In addition, Halcyon meets all applicable qualitative listing requirements of the Nasdaq Global Select Market, subject to certain corporate governance exemptions available to foreign private issuers ("FPIs") under Nasdaq Rule 5615(a)(3). As discussed in detail in Section IV of this memorandum and in the companion memorandum on corporate governance exemptions, Halcyon's two-tier board structure (Vorstand and Aufsichtsrat) under German corporate law and certain other features of German corporate governance practice differ from the unitary board model and specific governance mandates contemplated by the Nasdaq Listing Rules. Where such differences exist, Halcyon intends to rely on the FPI exemption and to provide full disclosure of the home-country practices followed in lieu of the applicable Nasdaq requirements, as required by Nasdaq Rule 5615(a)(3).
No impediments to listing have been identified at this time. We recommend that the Company proceed with the preparation of the Nasdaq listing application on the timeline described in Section VI below.
II. Background
A. The Issuer
Halcyon Semiconductor Aktiengesellschaft is a German public stock corporation (Aktiengesellschaft) incorporated and organized under the laws of the Federal Republic of Germany, with its registered seat in Munich, Bavaria, Germany. The Company is registered with the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) Munich under registration number HRB 217458. The Company's Legal Entity Identifier (LEI) is 5299007KBTVZ3XQHGL48.
The Company is headquartered at Maximilianstraße 72, 80539 Munich, Germany, and maintains additional offices, design centers, and fabrication facilities in Germany, Austria, the Netherlands, the United States, China, Japan, and South Korea. Halcyon was founded in 1997 and currently employs approximately 8,400 people worldwide, including approximately 3,200 engineers and research scientists.
Halcyon operates in the global power semiconductor industry and is recognized as a leading innovator in the design and manufacture of advanced power semiconductor devices. The Company's product portfolio centers on wide-bandgap semiconductor technologies, including silicon carbide (SiC) and gallium nitride (GaN) chips designed for high-efficiency power conversion and management applications. Halcyon's products serve critical end markets, including automotive (electric vehicle powertrains, on-board chargers, and advanced driver-assistance systems), industrial automation and control, renewable energy (solar inverters and wind power converters), and telecommunications infrastructure.
Halcyon's ordinary shares are currently listed on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) under the ticker symbol "HCY" and are admitted to trading on the Prime Standard segment of the Regulated Market (Regulierter Markt), which represents the highest transparency standard of the Deutsche Börse AG. As of January 10, 2026, the Company's market capitalization on the Frankfurt Stock Exchange was approximately €8.6 billion (approximately $9.27 billion at a EUR/USD exchange rate of €1.00 = $1.078).
B. The Proposed Offering
Halcyon proposes to conduct an initial public offering of ADSs in the United States through a Level III ADR program, which involves the registration of newly issued shares and the concurrent offering of existing shares by selling shareholders on a registered basis under the Securities Act. The key terms of the proposed offering are as follows:
Registration and Listing. The offering will be registered with the SEC on Form F-1 under the Securities Act. The ADSs will be listed on the Nasdaq Global Select Market under the proposed ticker symbol "HCYN."
ADS Structure. Each ADS will represent two ordinary shares (Stammaktien) of Halcyon. The ADSs will be issued by Meridian Trust Company, N.A., acting as depositary, pursuant to a Deposit Agreement to be entered into among Halcyon, the depositary, and all holders and beneficial owners of ADSs from time to time. Crestfield Transfer Services Inc. will serve as transfer agent and registrar for the ADSs. The ADSs will be eligible for settlement through The Depository Trust Company ("DTC") in book-entry form.
Offering Size and Structure. The targeted gross proceeds of the offering are $900,000,000 for the base deal. The total number of ADSs offered in the base deal is 21,400,000 ADSs, consisting of 15,000,000 primary ADSs (representing 30,000,000 newly issued ordinary shares to be sold by the Company) and 6,400,000 secondary ADSs (representing 12,800,000 existing ordinary shares to be sold by the selling shareholders, Rheintal Industrieholding GmbH and Kestrel Capital Partners AG). The underwriters will have an overallotment option to purchase up to 3,210,000 additional ADSs (representing 15% of the base deal) within 30 days following pricing.
Pricing. The proposed ADS price range is $39.00 to $45.00 per ADS, representing an implied midpoint price of approximately $42.06 per ADS and an implied midpoint price of approximately $21.03 per ordinary share.
Capital Structure. Prior to the offering, Halcyon has 215,000,000 ordinary shares outstanding. Following the offering (assuming no exercise of the overallotment option), Halcyon will have 245,000,000 ordinary shares outstanding, of which 30,000,000 will be newly issued shares underlying the primary ADSs.
Underwriting Syndicate. The offering will be managed by a syndicate led by Westbridge Securities LLC (lead left bookrunner), with Pinnacle Morgan & Co., Inc. and Andover Barcliffe Group Inc. serving as joint bookrunners, and Northpointe Capital LLC serving as co-manager.
C. Foreign Private Issuer Status
Halcyon intends to qualify, and has been preliminarily confirmed to qualify, as a "foreign private issuer" within the meaning of Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). A separate memorandum prepared by Calderwood & Harkness addresses the FPI analysis in detail, including an assessment under both the share-ownership test and the business-contacts tests set forth in Rule 3b-4(c). Based on preliminary analysis, fewer than 50% of Halcyon's outstanding voting securities are held directly or indirectly by residents of the United States, and no combination of the business-contacts tests would negate FPI status.
Halcyon's FPI status is directly relevant to the Nasdaq listing analysis for several reasons. First, it determines the scope of corporate governance exemptions available under Nasdaq Rule 5615(a)(3), which permits FPIs to follow home-country practices in lieu of certain Nasdaq corporate governance requirements. Second, it determines the applicable reporting framework under the Exchange Act (i.e., annual reports on Form 20-F and current reports on Form 6-K, rather than Forms 10-K, 10-Q, and 8-K). Third, it provides certain accommodations under the Sarbanes-Oxley Act, including extended phase-in periods for internal control audit requirements. These matters are discussed further in this memorandum and in the companion memoranda referenced above.
III. Nasdaq Global Select Market — Quantitative Initial Listing Standards
A. Overview of Listing Standard Alternatives
The Nasdaq Global Select Market is the most selective of the three tiers of the Nasdaq Stock Market (the others being the Nasdaq Global Market and the Nasdaq Capital Market). Nasdaq Rule 5315 sets forth the quantitative initial listing standards for the Nasdaq Global Select Market. An applicant for initial listing must satisfy one of four alternative sets of quantitative criteria:
(1) the Income Standard (Nasdaq Rule 5315(e)(1));
(2) the Equity Standard (Nasdaq Rule 5315(e)(2));
(3) the Market Value of Listed Securities Standard (Nasdaq Rule 5315(e)(3)); and
(4) the Total Assets/Total Revenue Standard (Nasdaq Rule 5315(e)(4)).
An applicant need only satisfy one of the four alternative standards in order to meet the quantitative threshold for initial listing. Each standard prescribes different combinations of financial metrics, market value thresholds, and distribution requirements. The standards are designed to admit to the Nasdaq Global Select Market only those companies with demonstrated financial strength, substantial market presence, and broad investor distribution.
This section analyzes Halcyon's eligibility under each of the four alternative standards. The analysis utilizes: (i) IFRS financial data for the fiscal years ended December 31, 2023 ("FY2023"), December 31, 2024 ("FY2024"), and December 31, 2025 ("FY2025," unaudited), as reported by Halcyon and as will be presented in the Registration Statement on Form F-1; and (ii) a EUR/USD exchange rate of €1.00 = $1.078, as quoted on January 10, 2026, for the purpose of converting euro-denominated figures to US dollars. The financial data used herein is summarized in Appendix A to this memorandum.
B. Income Standard (Nasdaq Rule 5315(e)(1))
1. Requirements. The Income Standard requires that an applicant satisfy each of the following criteria:
(a) Pre-tax income from continuing operations: At least $11 million in the aggregate in the three most recently completed fiscal years, with at least $2.2 million in each of the two most recently completed fiscal years, and positive pre-tax income from continuing operations in each of the three most recently completed fiscal years.
(b) Stockholders' equity: At least $45 million.
(c) Market value of publicly held shares: At least $45 million.
(d) Total holders: At least 450 round lot holders (i.e., holders of 100 or more shares or ADSs).
(e) Bid price: At least $4 per share (or per ADS, in the case of ADSs).
(f) Operating history: At least two years.
(g) Market makers: At least three (or four, depending on the application of certain Nasdaq interpretive guidance).
The Income Standard is generally considered the most demanding of the four alternatives, as it requires demonstrated profitability over a three-year period in addition to substantial equity and market value.
2. Halcyon's Position. Pre-tax income analysis. Halcyon has reported net income (after tax) as follows for the relevant three-year period: FY2023 — €482 million ($519.6 million); FY2024 — €541 million ($583.2 million); FY2025 (unaudited) — €612 million ($659.7 million). These figures represent after-tax net income; pre-tax income from continuing operations is materially higher in each period, as the Company's effective tax rate has been approximately 25–28% in the relevant periods. Even using after-tax figures as a conservative proxy, the aggregate net income for the three-year period is approximately €1,635 million ($1,762.5 million), which exceeds the $11 million aggregate threshold by a factor of more than 160. In each of the two most recently completed fiscal years (FY2024 and FY2025), net income exceeded $500 million, vastly surpassing the $2.2 million per-year threshold. Pre-tax income from continuing operations was positive in each of the three years and will be confirmed in the audited financial statements to be included in the Form F-1.
Stockholders' equity. As of December 31, 2025 (unaudited), Halcyon reported total assets of €7,450 million ($8,031.1 million) and total debt of €890 million ($959.4 million), with cash and cash equivalents of €740 million ($797.7 million). While the precise stockholders' equity figure will be confirmed in the audited balance sheet, we note that total assets minus total liabilities (including debt and other liabilities) will yield stockholders' equity in the range of several billion euros. This vastly exceeds the $45 million minimum. For reference, based on publicly available information from the Frankfurt Stock Exchange, Halcyon's stockholders' equity as of December 31, 2024 was approximately €4.8 billion ($5.2 billion), and the FY2025 figure is expected to be higher given the Company's strong net income for the year.
Market value of publicly held shares. Halcyon's aggregate market capitalization as of January 10, 2026 was approximately €8.6 billion ($9.27 billion). Post-IPO, the publicly held portion (free float) of shares and ADSs is estimated to be approximately 74.4% of total shares outstanding (based on the shareholder data presented in Appendix C), implying a market value of publicly held shares of approximately $6.9 billion. This vastly exceeds the $45 million minimum.
Round lot holders. The minimum requirement of 450 round lot holders will be confirmed following the completion of the offering. The underwriting syndicate — led by Westbridge Securities LLC and including Pinnacle Morgan & Co., Inc., Andover Barcliffe Group Inc., and Northpointe Capital LLC — is expected to distribute the ADSs broadly to both institutional and retail investors in the United States and internationally. Given the size of the offering ($900 million base deal), the broad-based marketing effort, and the participation of a four-member underwriting syndicate, we anticipate that the 450 round lot holder threshold will be readily achieved at closing. We recommend that the Company and its counsel confirm with Westbridge Securities (Jonathan Hartwell, lead engagement partner) that the syndicate's distribution plan is designed to ensure compliance with this requirement.
Bid price. The proposed ADS price range of $39.00 to $45.00 per ADS is well above the $4.00 minimum bid price requirement.
Operating history. Halcyon was founded in 1997 and has been in continuous operation for more than 28 years. The Company has been listed on the Frankfurt Stock Exchange for over 15 years. This vastly exceeds the two-year minimum operating history requirement.
Market makers. At least three to four members of the underwriting syndicate and their affiliates are expected to serve as registered market makers in the ADSs on Nasdaq, satisfying the market maker requirement.
Conclusion. Halcyon satisfies all requirements of the Income Standard under Nasdaq Rule 5315(e)(1) by very substantial margins.
C. Equity Standard (Nasdaq Rule 5315(e)(2))
1. Requirements. The Equity Standard requires that an applicant satisfy each of the following criteria:
(a) Stockholders' equity: At least $30 million.
(b) Market value of publicly held shares: At least $18 million.
(c) Operating history: At least two years.
(d) Total holders: At least 450 round lot holders.
(e) Bid price: At least $4 per share (or per ADS).
(f) Market makers: At least three (or four).
The Equity Standard does not require demonstrated profitability and is therefore available to pre-profit companies with sufficient equity and market value. The stockholders' equity threshold ($30 million) and the market value of publicly held shares threshold ($18 million) are both lower than under the Income Standard.
2. Halcyon's Position. All metrics required by the Equity Standard are satisfied by even larger margins than under the Income Standard, as the applicable thresholds are generally lower while Halcyon's financial position remains the same. Specifically:
• Stockholders' equity of several billion dollars vastly exceeds the $30 million minimum.
• Market value of publicly held shares of approximately $6.9 billion vastly exceeds the $18 million minimum.
• Operating history of more than 28 years vastly exceeds the two-year minimum.
• Bid price, round lot holders, and market maker requirements are all satisfied as described in Section III.B.2 above.
Conclusion. Halcyon satisfies all requirements of the Equity Standard under Nasdaq Rule 5315(e)(2) by very substantial margins.
D. Market Value of Listed Securities Standard (Nasdaq Rule 5315(e)(3))
1. Requirements. The Market Value of Listed Securities Standard requires that an applicant satisfy each of the following criteria:
(a) Market value of listed securities: At least $160 million.
(b) Market value of publicly held shares: At least $45 million.
(c) Total holders: At least 450 round lot holders.
(d) Bid price: At least $4 per share (or per ADS).
(e) Market makers: At least three (or four).
This standard focuses on market value rather than profitability or equity levels and is therefore available to companies with large market capitalizations that may not meet the other financial criteria.
2. Halcyon's Position. Market value of listed securities. The market value of listed securities for Nasdaq purposes is calculated based on the total number of ADSs outstanding multiplied by the ADS price. Post-IPO, assuming the base deal without exercise of the overallotment option, at least 21,400,000 ADSs will be outstanding and listed on Nasdaq. At the midpoint ADS price of approximately $42.06, the market value of the listed ADSs alone would be approximately $900 million, vastly exceeding the $160 million minimum. Moreover, the total implied market value of all outstanding shares and ADSs — based on 245,000,000 post-IPO ordinary shares at an implied per-share price of approximately $21.03 — would be approximately $5.15 billion. Even if only the ADSs listed on Nasdaq are counted for this purpose, the threshold is exceeded by a factor of more than five. We also note that Halcyon's existing Frankfurt-listed ordinary shares carry a market capitalization of approximately €8.6 billion ($9.27 billion), providing additional context for the Company's market valuation.
Other criteria. The market value of publicly held shares, round lot holders, bid price, and market maker requirements are all satisfied as described in Sections III.B.2 and III.C.2 above.
Conclusion. Halcyon satisfies all requirements of the Market Value of Listed Securities Standard under Nasdaq Rule 5315(e)(3) by very substantial margins.
E. Total Assets/Total Revenue Standard (Nasdaq Rule 5315(e)(4))
1. Requirements. The Total Assets/Total Revenue Standard requires that an applicant satisfy each of the following criteria:
(a) Total assets and total revenue: Each at least $80 million in the most recently completed fiscal year (or in two of the three most recently completed fiscal years).
(b) Market value of publicly held shares: At least $45 million.
(c) Total holders: At least 450 round lot holders.
(d) Bid price: At least $4 per share (or per ADS).
(e) Market makers: At least three (or four).
This standard is designed for large companies that may not meet the profitability requirements of the Income Standard but have substantial asset bases and revenue streams.
2. Halcyon's Position. Total assets. Halcyon's total assets for FY2025 were €7,450 million ($8,031.1 million at the conversion rate of €1.00 = $1.078). Total assets for FY2024 were €6,820 million ($7,351.9 million), and for FY2023 were €6,310 million ($6,802.2 million). In each of the three most recently completed fiscal years, total assets exceeded $80 million by a factor of more than 85.
Total revenue. Halcyon's revenue for FY2025 was €3,820 million ($4,118.0 million). Revenue for FY2024 was €3,508 million ($3,781.6 million), and for FY2023 was €3,214 million ($3,464.7 million). In each of the three most recently completed fiscal years, total revenue exceeded $80 million by a factor of more than 43.
Other criteria. The market value of publicly held shares, round lot holders, bid price, and market maker requirements are all satisfied as described above.
Conclusion. Halcyon satisfies all requirements of the Total Assets/Total Revenue Standard under Nasdaq Rule 5315(e)(4) by very substantial margins.
F. Summary of Quantitative Standard Compliance
The following table summarizes Halcyon's compliance with the key quantitative thresholds under each of the four alternative listing standards:
Recommendation. We recommend that the Nasdaq listing application reference the Income Standard (Nasdaq Rule 5315(e)(1)) as the primary basis for qualification, as it is the most demanding of the four alternative standards and its satisfaction affirmatively demonstrates the depth and consistency of Halcyon's financial performance. Qualification under the Income Standard provides the strongest signal of financial strength to Nasdaq Listing Qualifications staff and to the investment community. We note, however, that Halcyon qualifies under all four alternative standards, providing substantial margin and flexibility.
IV. Nasdaq Global Select Market — Qualitative / Corporate Governance Listing Requirements
A. Overview. In addition to the quantitative financial standards discussed in Section III above, the Nasdaq Listing Rules impose qualitative listing requirements, including corporate governance standards set forth in the Nasdaq Rule 5600 Series. These corporate governance requirements are designed to promote sound governance practices, protect shareholder interests, and ensure transparency and accountability. They address matters such as board independence, audit committee composition, compensation committee composition, director nominations, codes of conduct, shareholder approval for certain transactions, and related matters.
A critical feature of the Nasdaq Listing Rules for international issuers is that foreign private issuers, as defined in Rule 3b-4 under the Exchange Act, may elect to follow home-country corporate governance practices in lieu of certain Nasdaq corporate governance requirements, pursuant to Nasdaq Rule 5615(a)(3). This exemption recognizes that companies incorporated in jurisdictions outside the United States are subject to their own domestic corporate governance frameworks, which may differ in structure and substance from the US governance model but may nonetheless provide equivalent or comparable protections. To rely on the FPI exemption, an FPI must: (i) disclose each Nasdaq requirement that it does not follow; (ii) describe the alternative home-country practice that it follows instead; and (iii) include such disclosure in its annual report on Form 20-F (or, if applicable, its registration statement).
This section identifies each material corporate governance requirement applicable to Nasdaq Global Select Market listed companies and describes Halcyon's intended approach with respect to each, including where the Company intends to rely on the FPI exemption. A companion memorandum (currently in preparation) provides a more detailed analysis of each corporate governance exemption, including the specific German law provisions and German Corporate Governance Code (Deutscher Corporate Governance Kodex, "DCGK") recommendations that constitute the applicable home-country practices.
B. Board of Directors — Independence Requirements (Nasdaq Rule 5605(b))
1. Nasdaq Requirement. Nasdaq Rule 5605(b)(1) requires that a majority of the board of directors of a listed company be comprised of "independent directors" as defined in Nasdaq Rule 5605(a)(2). Under that definition, an "independent director" is a person other than an executive officer or employee of the company, or any other individual having a relationship which, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The rule also enumerates specific disqualifying relationships (e.g., employment by the company within the preceding three years, receipt of compensation exceeding $120,000 during any twelve-month period, affiliation with the company's auditor, etc.).
2. Halcyon's Approach. Halcyon has a two-tier board structure mandated by the German Stock Corporation Act (Aktiengesetz, "AktG"). This structure consists of: (i) the Management Board (Vorstand), which is responsible for managing the Company's business operations; and (ii) the Supervisory Board (Aufsichtsrat), which is responsible for overseeing the Management Board. The two-tier structure is mandatory for a German Aktiengesellschaft under Section 76 et seq. AktG (Management Board) and Section 95 et seq. AktG (Supervisory Board).
This governance framework differs fundamentally from the unitary board model contemplated by the Nasdaq Listing Rules. Under the German two-tier system, members of the Management Board are not members of the Supervisory Board, and vice versa. The Supervisory Board — whose members are comparable in function to non-executive or outside directors in a US unitary board model — exercises the oversight and monitoring function. Halcyon's Supervisory Board currently consists of twelve members, of whom eight are elected by the shareholders at the general meeting (Hauptversammlung) and four are elected by employee representatives pursuant to the German One-Third Participation Act (Drittelbeteiligungsgesetz). The Chair of the Supervisory Board is Prof. Dr. Anneliese Voss, who has served as an independent member of the Supervisory Board since 2018 and satisfies the independence criteria of both the DCGK and, in our preliminary assessment, the Nasdaq independence standards.
Halcyon intends to rely on the FPI exemption under Nasdaq Rule 5615(a)(3) with respect to the requirement that a majority of the board be comprised of independent directors, disclosing its home-country practice of the dual board structure and the composition and independence criteria applicable to its Supervisory Board under German corporate law and the DCGK. A detailed analysis of this exemption is provided in the companion memorandum on corporate governance exemptions for FPIs.
C. Executive Sessions (Nasdaq Rule 5605(b)(2))
1. Nasdaq Requirement. Nasdaq Rule 5605(b)(2) requires that independent directors of a listed company hold regularly scheduled meetings at which only independent directors are present (i.e., "executive sessions" without management participation).
2. Halcyon's Approach. Under the German two-tier board system, the Supervisory Board (Aufsichtsrat) meets as a matter of course without the presence of the Management Board (Vorstand). While Management Board members may be invited to attend Supervisory Board meetings for the purpose of reporting on specific topics, the Supervisory Board regularly meets and deliberates in sessions at which no Management Board members are present. This is inherent in the structural separation of the two boards under German corporate law and represents a long-established governance practice.
Halcyon intends to follow its home-country practice in this regard, which effectively satisfies the spirit and purpose of the Nasdaq executive sessions requirement. The Company may nonetheless formally claim the FPI exemption under Nasdaq Rule 5615(a)(3) with respect to this requirement in order to maintain consistency and clarity in its corporate governance exemption disclosures.
D. Audit Committee (Nasdaq Rule 5605(c) / Exchange Act Rule 10A-3)
1. Nasdaq/SEC Requirements. The audit committee requirements applicable to Nasdaq-listed companies arise under both the Nasdaq Listing Rules and the Exchange Act. The key requirements are as follows:
(a) Nasdaq Rule 5605(c)(2): Each listed company must have an audit committee of at least three members, each of whom must be an "independent director" as defined under Nasdaq Rule 5605(a)(2) and must satisfy the additional independence criteria set forth in Rule 5605(c)(2)(A).
(b) Exchange Act Rule 10A-3(b)(1): Each member of the audit committee must be independent within the meaning of Rule 10A-3, which imposes a separate and generally more restrictive independence standard that prohibits, among other things, the acceptance of any consulting, advisory, or other compensatory fee from the issuer (other than in the member's capacity as a board or committee member) and affiliation with the issuer or any subsidiary.
(c) Financial literacy and expertise: Each member of the audit committee must be able to read and understand fundamental financial statements. At least one member must qualify as an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K (or Item 16A of Form 20-F for FPIs).
(d) Written charter: The audit committee must have a written charter that specifies the committee's purpose, responsibilities, and authority, including with respect to the appointment, compensation, retention, and oversight of the independent auditor.
(e) Responsibilities: The audit committee must be directly responsible for the appointment, compensation, retention, and oversight of the work of the independent auditor, and must establish procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing matters, including procedures for the confidential, anonymous submission of concerns by employees.
2. Halcyon's Approach. Exchange Act Rule 10A-3 provides a limited exemption for FPIs under Rule 10A-3(c)(3), but this exemption does not eliminate the requirement for an audit committee. Rather, it permits an FPI to satisfy the audit committee requirements through a board of auditors or a statutory auditor body established and selected pursuant to home-country legal or listing provisions, provided that certain conditions are met. However, the practical consensus among issuers and their counsel is that the most straightforward and investor-friendly approach is to establish or designate an audit committee that fully satisfies the core requirements of Rule 10A-3.
Halcyon intends to establish (or designate from its existing Supervisory Board structure) an Audit Committee (Prüfungsausschuss) that satisfies the requirements of Exchange Act Rule 10A-3 and the core requirements of Nasdaq Rule 5605(c), including the independence, financial literacy, and financial expert requirements. The Company's existing Supervisory Board already maintains an Audit Committee (Prüfungsausschuss) under the DCGK and the Company's Articles of Association (Satzung), which provides a strong foundation for compliance with US requirements. Calderwood & Harkness is currently preparing a separate draft Audit Committee Charter in English that will satisfy the requirements of both the Nasdaq Listing Rules and Exchange Act Rule 10A-3, incorporating the customary scope of duties, pre-approval policies for auditor services, and whistleblower procedures.
Halcyon may rely on the FPI exemption under Nasdaq Rule 5615(a)(3) for certain Nasdaq audit committee requirements that go beyond the Rule 10A-3 baseline (for example, certain Nasdaq-specific requirements regarding the scope of the audit committee charter or the committee's role in reviewing related-party transactions), to the extent that German law and the DCGK prescribe different practices.
E. Compensation Committee (Nasdaq Rule 5605(d))
1. Nasdaq Requirement. Nasdaq Rule 5605(d) requires that each listed company have a compensation committee composed entirely of independent directors as defined under the Nasdaq Listing Rules. The compensation committee must have a written charter specifying its purpose and responsibilities, which must include, among other things: (i) determining or recommending to the board the compensation of the chief executive officer and other executive officers; (ii) overseeing the company's overall compensation philosophy and strategy; and (iii) reviewing and making recommendations regarding equity-based compensation plans.
2. Halcyon's Approach. Under German corporate law, the compensation of members of the Management Board (Vorstand) is determined by the Supervisory Board (Aufsichtsrat) as a whole, in accordance with the provisions of Section 87 AktG and the recommendations of the DCGK. Section 87 AktG requires that the total compensation of each Management Board member be appropriate in relation to the member's duties and performance and the condition of the company, and must not exceed customary levels without special justification. The Supervisory Board is required to adopt a clear and comprehensible compensation system for the Management Board members, which must be submitted to the general meeting (Hauptversammlung) for an advisory vote (the "say-on-pay" vote) pursuant to Section 120a AktG.
In practice, many German Aktiengesellschaften, including Halcyon, maintain a Personnel and Compensation Committee (Personal- und Vergütungsausschuss) of the Supervisory Board that prepares compensation decisions for the full Supervisory Board. However, the final authority for determining Management Board compensation rests with the Supervisory Board as a whole, and the composition and procedures of this process are governed by German corporate law rather than by Nasdaq standards.
Halcyon intends to rely on the FPI exemption under Nasdaq Rule 5615(a)(3) with respect to the compensation committee requirements of Nasdaq Rule 5605(d) and to follow German home-country practices regarding the determination of executive compensation. The Company will disclose in its Form 20-F and in the corporate governance exemption notice the specific German legal provisions and DCGK recommendations that it follows in lieu of the Nasdaq requirements.
F. Director Nominations (Nasdaq Rule 5605(e))
1. Nasdaq Requirement. Nasdaq Rule 5605(e) requires that director nominees of a listed company be selected, or recommended for board selection, either by: (i) a nominations committee composed solely of independent directors; or (ii) a majority of the independent directors on the board, in a vote in which only independent directors participate. The company must also adopt a formal written charter or board resolution addressing the nominations process.
2. Halcyon's Approach. Under the German two-tier board system, the appointment and removal of members of the Management Board (Vorstand) is the responsibility of the Supervisory Board (Aufsichtsrat) pursuant to Section 84 AktG. Members of the Supervisory Board are elected by the shareholders at the general meeting (Hauptversammlung) pursuant to Section 101 AktG, and, where applicable, by employee representatives pursuant to the relevant codetermination legislation (in Halcyon's case, the One-Third Participation Act). The Supervisory Board typically establishes a Nominations Committee (Nominierungsausschuss) that proposes candidates for Supervisory Board election to the shareholders, but the ultimate decision rests with the shareholders.
This process differs materially from the Nasdaq model, which contemplates that a nominations committee or independent director majority will select or recommend all director nominees. In Germany, the shareholder election of Supervisory Board members and the employee-representative election process are legally mandated and cannot be overridden by a committee structure.
Halcyon intends to rely on the FPI exemption under Nasdaq Rule 5615(a)(3) with respect to the director nominations requirements of Nasdaq Rule 5605(e) and to follow the AktG provisions and established German governance practices regarding the nomination and election of Supervisory Board members and the appointment of Management Board members.
G. Code of Conduct (Nasdaq Rule 5610)
1. Nasdaq Requirement. Nasdaq Rule 5610 requires that each listed company adopt a code of conduct applicable to all directors, officers, and employees, meeting the definition of a "code of ethics" under Section 406(c) of the Sarbanes-Oxley Act of 2002 and the related regulations. The code must be publicly available and must provide for an enforcement mechanism, including for the processing of waivers granted to directors or executive officers.
2. Halcyon's Approach. Halcyon will adopt a US-compliant Code of Business Conduct and Ethics prior to the effectiveness of the Registration Statement on Form F-1. A draft of the Code is currently being prepared by Calderwood & Harkness in coordination with the Company's General Counsel, Wilhelm Ostermann. The Code will be applicable to all members of the Management Board, all members of the Supervisory Board, and all employees of Halcyon and its subsidiaries worldwide. It will address, among other matters, conflicts of interest, corporate opportunities, confidentiality, fair dealing, compliance with laws and regulations, and reporting and enforcement procedures.
No FPI exemption is needed or relied upon with respect to this requirement. Halcyon intends to fully comply with Nasdaq Rule 5610.
H. Shareholder Approval Requirements (Nasdaq Rule 5635)
1. Nasdaq Requirement. Nasdaq Rule 5635 requires shareholder approval for certain specified transactions by a listed company. The principal circumstances requiring shareholder approval include:
(a) Rule 5635(a): Acquisition transactions involving the issuance of shares equal to 20% or more of shares outstanding or 20% or more of voting power prior to the transaction.
(b) Rule 5635(b): Changes of control (i.e., issuances that will result in a change of control of the company).
(c) Rule 5635(c): Equity compensation plans and arrangements, including new plans, material amendments to existing plans, and certain individual equity awards.
(d) Rule 5635(d): Private placements at a price less than the greater of book value or market value that result in the issuance of shares equal to 20% or more of shares outstanding or 20% or more of voting power prior to the issuance.
2. Halcyon's Approach. Halcyon intends to rely on the FPI exemption under Nasdaq Rule 5615(a)(3) for the shareholder approval requirements of Nasdaq Rule 5635. The German Aktiengesetz has its own comprehensive regime governing shareholder approval for significant corporate actions, which differs in certain respects from the Nasdaq requirements but provides robust shareholder protections. Relevant provisions include:
• Section 186 AktG, which grants shareholders pre-emptive rights (Bezugsrecht) in connection with new share issuances and requires a supermajority (typically 75%) shareholder vote at the general meeting to exclude such rights;
• Section 179 AktG, which requires shareholder approval for amendments to the Articles of Association (Satzung);
• Section 293 AktG, which requires shareholder approval for domination and profit transfer agreements;
• Section 319 AktG, which governs shareholder approval for certain transformation and merger transactions; and
• Section 71 et seq. AktG, which imposes restrictions on share buybacks.
The disclosure in the corporate governance exemption notice will describe each provision of Nasdaq Rule 5635 that Halcyon does not follow, and will identify the specific German law requirements that are followed instead, providing investors with a clear understanding of the applicable shareholder protection framework.
I. Shareholder Meeting Quorum (Nasdaq Rule 5620(c))
1. Nasdaq Requirement. Nasdaq Rule 5620(c) requires that each listed company provide in its bylaws for a minimum quorum of 33⅓% of the outstanding shares of the company's common voting stock for any meeting of shareholders.
2. Halcyon's Approach. The quorum requirements for the general meeting (Hauptversammlung) of Halcyon are set forth in the Company's Articles of Association (Satzung) in accordance with German corporate law. Under the AktG, there is generally no statutory minimum quorum requirement for ordinary general meeting resolutions (simple majority of votes cast is sufficient), although certain extraordinary resolutions (e.g., capital measures, amendments to the Satzung) require a supermajority of 75% of the represented share capital. The Company's Satzung may, and in Halcyon's case does, set forth specific quorum provisions consistent with German law and market practice.
Halcyon intends to rely on the FPI exemption under Nasdaq Rule 5615(a)(3) with respect to the quorum requirement, as the German legal framework and the Company's Satzung together provide the applicable rules governing the validity of shareholder meeting proceedings.
J. Voting Rights (Nasdaq Rule 5640)
Nasdaq Rule 5640 prohibits a listed company from taking any action that would have the effect of disparately reducing or restricting the per-share voting rights of existing shareholders through any corporate action or issuance. This rule is designed to prevent the creation of dual-class or supervoting structures after listing and to protect existing shareholders from dilution of their voting power.
Halcyon has a single class of ordinary shares (Stammaktien), without nominal value (Stückaktien), each of which carries one vote at the general meeting (Hauptversammlung). The Company has not issued, and does not currently intend to issue, any class of shares with different or superior voting rights. The Company has no dual-class or supervoting share structure.
Accordingly, Halcyon's existing capital structure is fully consistent with Nasdaq Rule 5640, and no FPI exemption is needed or relied upon with respect to this requirement.
K. Distribution of Annual and Interim Reports (Nasdaq Rule 5250(d))
Nasdaq Rule 5250(d) requires listed companies to make annual reports available to shareholders and to file such reports with Nasdaq. For foreign private issuers, the filing of annual reports on Form 20-F with the SEC and the furnishing of current reports on Form 6-K as required under the Exchange Act satisfy the Nasdaq distribution and reporting requirements.
Halcyon will comply with the applicable Exchange Act reporting requirements for FPIs, including the filing of annual reports on Form 20-F and the furnishing of current reports on Form 6-K. The Company will also continue to comply with its disclosure obligations under the Prime Standard listing rules of the Frankfurt Stock Exchange and the European Union Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Accordingly, the Nasdaq distribution requirement will be satisfied through the Company's SEC filings.
L. Proxy Solicitation (Nasdaq Rule 5620(b))
1. Nasdaq Requirement. Nasdaq Rule 5620(b) generally requires listed companies to solicit proxies for all meetings of shareholders and to provide proxy statements to shareholders in connection with such meetings.
2. Halcyon's Approach. Halcyon intends to rely on the FPI exemption under Nasdaq Rule 5615(a)(3) with respect to the proxy solicitation requirement. German corporate law does not require proxy solicitation in the manner contemplated by US securities law and the Nasdaq Listing Rules. Instead, the AktG requires the Management Board to convene the general meeting (Hauptversammlung) by providing notice and agenda to shareholders in accordance with prescribed timelines and methods (Section 121 et seq. AktG). Shareholders may attend the meeting in person, appoint proxies of their choice, or (where the Satzung and applicable regulations permit) participate and vote electronically or by mail. The Company's practices in this regard comply with the AktG and the DCGK and are consistent with established German market practice.
As an FPI, Halcyon is not required to comply with the proxy rules under Section 14 of the Exchange Act, pursuant to the exemption provided by Exchange Act Rule 3a12-3(b).
V. Listing of ADSs — Special Considerations
A. ADSs as the Listed Security
The security to be listed on the Nasdaq Global Select Market will be the ADSs, not the underlying ordinary shares. The Nasdaq listing application will be filed for the ADSs representing ordinary shares of Halcyon. Each ADS will represent two ordinary shares (Stammaktien) of the Company, as described in Section II.B above.
The ADSs will be issued pursuant to a Deposit Agreement to be entered into among Halcyon, Meridian Trust Company, N.A. (as depositary), and all holders and beneficial owners of ADSs from time to time. The Deposit Agreement will govern the terms and conditions of the ADSs, including the deposit and withdrawal of underlying ordinary shares, the distribution of dividends and other payments, the exercise of voting rights through the depositary, and the payment of depositary fees and charges. A form of the Deposit Agreement will be filed as an exhibit to the Registration Statement on Form F-1.
Crestfield Transfer Services Inc. will serve as the transfer agent and registrar for the ADSs. The ADSs will be represented by one or more master American Depositary Receipts ("ADRs") registered in the name of Cede & Co., the nominee of DTC, and will be eligible for DTC book-entry settlement, allowing for efficient clearing and settlement through the US securities infrastructure.
B. Round Lot Holder and Distribution Requirements
As noted in Section III above, Nasdaq requires that a listed company have at least 450 round lot holders, defined as holders of 100 or more ADSs (or shares, as applicable). This requirement must be satisfied at the time of initial listing.
The underwriting syndicate — consisting of Westbridge Securities LLC (lead left bookrunner), Pinnacle Morgan & Co., Inc. and Andover Barcliffe Group Inc. (joint bookrunners), and Northpointe Capital LLC (co-manager) — is expected to distribute the ADSs broadly to institutional and retail investors in the United States and, for the non-US tranche, internationally under Regulation S. Given the substantial size of the offering ($900 million in gross proceeds for the base deal), the active and well-developed investor interest in the power semiconductor sector, and the broad-based marketing effort planned for the roadshow, we are confident that the 450 round lot holder threshold will be readily met at closing.
We recommend that Halcyon and its counsel confirm with the lead left bookrunner, Westbridge Securities (contact: Jonathan Hartwell), that the syndicate's allocation and distribution procedures are designed to ensure compliance with the round lot holder requirement, and that the final allocation report provided to Nasdaq includes sufficient detail to verify compliance.
The ADSs will be eligible for DTC book-entry settlement, which will facilitate broad distribution and secondary market trading. The DTC eligibility of the ADSs will be confirmed by a DTC eligibility letter to be obtained prior to listing.
C. Publicly Held Shares (Float)
Nasdaq requires that the publicly held shares (or, in the case of ADSs, the publicly held ADSs) of a listed company have a market value of at least $45 million at the time of initial listing. For this purpose, "publicly held shares" generally exclude shares held by officers, directors, and holders of 10% or more of the company's outstanding shares.
Post-offering, the publicly held ADSs in the base deal will consist of 21,400,000 ADSs distributed to public investors. At the midpoint ADS price of approximately $42.06, the aggregate market value of the publicly held ADSs alone would be approximately $900 million, vastly exceeding the $45 million minimum. Even when considering only the post-offering free float of ordinary shares (approximately 182,335,000 shares, or 74.4% of the 245,000,000 post-IPO shares outstanding, based on the ownership data in Appendix C) and excluding the shares held by Rheintal Industrieholding GmbH, Kestrel Capital Partners AG, and the Halcyon Employee Stock Ownership Trust, the implied market value of the free float at the midpoint ADS-implied per-share price of approximately $21.03 would be approximately $3.8 billion. The float criterion is met by a very substantial margin under any reasonable analysis.
D. Existing Frankfurt Stock Exchange Listing
Halcyon's ordinary shares will continue to trade on the Frankfurt Stock Exchange (FRA: HCY) on the Prime Standard segment of the Regulated Market following the Nasdaq listing of the ADSs. The Nasdaq listing of ADSs will be in addition to, and not in replacement of, the existing Frankfurt listing. The Company will therefore be a dual-listed issuer, with its ordinary shares traded in Europe on the Frankfurt Stock Exchange and its ADSs traded in the United States on the Nasdaq Global Select Market.
The dual listing raises several operational and regulatory considerations that Halcyon and its advisors should continue to monitor:
Arbitrage and pricing alignment. The dual listing may create opportunities for cross-market arbitrage, as traders may seek to profit from pricing discrepancies between the ADS price on Nasdaq and the implied ADS price based on the Frankfurt-listed ordinary share price (adjusted for the ADS ratio and the prevailing EUR/USD exchange rate). While arbitrage activity generally promotes pricing efficiency and alignment between the two markets, it may also contribute to short-term volatility, particularly during periods of significant currency fluctuation.
Currency risk. Halcyon's underlying equity is denominated in euros, while the ADSs will be priced and traded in US dollars. Fluctuations in the EUR/USD exchange rate will directly affect the US dollar value of the ADSs, independent of changes in the euro-denominated value of the underlying ordinary shares. This currency risk should be prominently disclosed in the prospectus risk factors (see Section VIII below).
Coordination of disclosure obligations. As a dual-listed issuer, Halcyon will be subject to disclosure obligations under both the German and European regulatory framework (including BaFin regulations and the EU Market Abuse Regulation) and the US regulatory framework (including SEC reporting requirements under the Exchange Act). The Company will need to implement robust internal procedures to ensure timely and coordinated disclosure of material information in both markets, taking into account differences in trading hours, materiality standards, and safe harbors. Calderwood & Harkness will work with the Company's German counsel, Bähr Stein Rechtsanwälte, to develop a coordinated disclosure protocol.
Cross-border deposit and withdrawal. The Deposit Agreement and related arrangements will include provisions for the seamless deposit and withdrawal of ordinary shares between the Frankfurt and US markets, facilitated by Ashgrove Enterprises Banking AG (the central securities depository for the Frankfurt market) and DTC (the central securities depository for the US market). Holders of ordinary shares on the Frankfurt Stock Exchange will be able to deposit their shares with the depositary in exchange for ADSs, and holders of ADSs will be able to cancel their ADSs and withdraw the underlying ordinary shares for trading on the Frankfurt market, subject to the terms of the Deposit Agreement (including applicable depositary fees, cancellation charges, and any applicable tax withholding). This interchangeability between the two markets is important for maintaining pricing alignment and liquidity.
VI. Listing Application Process
A. Timing. The Nasdaq listing application must be prepared and filed in advance of the anticipated effectiveness of the Registration Statement on Form F-1. Nasdaq Listing Qualifications staff typically requires four to six weeks to review and process a listing application, although review times may vary depending on the complexity of the application and the volume of applications pending at the time of submission.
Based on the current target timeline for the IPO, the key dates are as follows:
Based on this timeline, the Nasdaq listing application should be submitted no later than approximately mid-May 2026 (i.e., approximately six weeks before the target first trading date of July 2, 2026) to allow adequate time for Nasdaq review and any comments or supplemental requests. We recommend targeting submission by May 15, 2026, to provide a comfortable buffer.
B. Required Documentation
The following documents and materials will be required in connection with the Nasdaq listing application:
1. Completed Nasdaq listing application form. This is the standard form prescribed by Nasdaq for initial listing applications on the Nasdaq Global Select Market. Calderwood & Harkness will prepare the application in coordination with Halcyon and the underwriting syndicate.
2. Corporate governance exemption notice. Nasdaq Rule 5615(a)(3) requires that an FPI relying on home-country corporate governance practices submit written notification to Nasdaq identifying each Nasdaq requirement that it does not follow and describing the alternative home-country practice. A separate draft of this notice is being prepared by Audrey Zhou of Calderwood & Harkness, in coordination with Bähr Stein Rechtsanwälte (Dr. Christoph Maurelban and Johanna Weiß) for confirmation of the applicable German law provisions and home-country practices.
3. Certified copies of organizational documents. Including the Company's Articles of Association (Satzung), a current extract from the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) Munich, and related corporate documents.
4. Audited financial statements. IFRS financial statements for FY2023, FY2024, and FY2025 (the FY2025 audit is currently in progress with Blackmere & Whitfield), as will be included in the Form F-1 Registration Statement.
5. Deposit Agreement. A copy of the Deposit Agreement among Halcyon, Meridian Trust Company, N.A. (depositary), and all holders and beneficial owners of ADSs.
6. Form F-1 Registration Statement. A copy of the Registration Statement on Form F-1, including all exhibits.
7. DTC eligibility letter. Confirmation from DTC that the ADSs are eligible for DTC book-entry settlement. Crestfield Transfer Services Inc. (contact: Angela Moretti) will coordinate the DTC eligibility process.
8. Listing fees. Payment of the applicable initial listing fee and any administrative fees, as described in Section VI.C below.
C. Listing Fees
The initial listing fee for the Nasdaq Global Select Market is calculated based on the total number of shares (or ADSs) outstanding at the time of listing, in accordance with the fee schedule set forth in Nasdaq Rule 5910. Based on the anticipated 21,400,000 ADSs to be listed in the base deal (with an additional 3,210,000 ADSs subject to the overallotment option), the estimated initial listing fee will be determined by reference to the applicable tier of the fee schedule. The maximum initial listing fee (applicable to issuers with large numbers of shares outstanding) is currently $295,000, and the applicable fee for Halcyon is expected to be in the range of $225,000 to $295,000, depending on the final number of ADSs listed.